HollyFrontier Corp. expects to spend $645-810 million on capital projects in 2022, a notable drop from a year in which it spent about $300 million on turnarounds and more than $500 million to set up a renewable diesel operation.
The leaders of Dallas-based HollyFrontier outlined their spending plans for 2022 in a US Securities and Exchange Commission filing, saying they are looking to put $250-270 million to work on their refining and marketing operations. That’s an increase of $60 million from 2021 and comes after HollyFrontier paid $614 million for a Shell refinery in the Seattle area. The company also plans to spend $45-60 million on its lubricants division, a small increase from 2021.
The two areas bringing the biggest change from 2021 are turnarounds-catalysts and renewables. In the former of those categories, HollyFrontier executives plan to spend $70-100 million, a drastic drop off the 2021 program. The change is in line with the company’s 2019-2020 cycle, when it spent $318 million and $95 million, respectively.
HollyFrontier’s renewables push – which involves renewable diesel production units in Cheyenne, Wyo., and Artesia, NM, as well as a pre-treatment unit at the latter complex – garnered nearly half of the company’s roughly $1.2 billion in capex in 2021. Those three projects will eventually cost the company $800-900 million; 2022 will see the last $225-300 million of that amount put to work. The midpoint is about $60 million higher than had been forecast late 2021 because of the timing of some invoices.
The Wyoming renewable diesel unit should book its first sales in first-quarter 2022 after being converted from crude refining. It will be followed in the second quarter by the New Mexico plant, and the pre-treatment unit – which execs expect to cover about 80% of their total feedstock needs – is nearing completion. Combined, the two renewable diesel units will have the capacity to produce 210 million gal/year. HollyFrontier will also begin to report their results as a standalone segment.
Geert De Lombaerde | Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.